Investing, Thank You Sir May I Have Another

The Much Maligned Phone Company

Kids today probably don’t have a frame of reference to understand how maligned phone companies were back in the day. Very few people speak of them now since fewer and fewer people have actual hard lines (as they were called in “The Matrix”.) Back in the day phone companies were universally shit on because, quite honestly phone companies were shit. Without exception.

Today a “party line” is at best some Web chat thing kids visit and at worst it is a line of cocaine for them at a party. The rest of us grew up with party lines where more than one house shared a phone line. Some had different ring patters for the different houses and others simply rang hoping the correct person picked up. No, I’m not kidding. I was too young to use the phone much, but I remember just how frustrated my parents got when they wanted to use the phone and couldn’t. One of the houses on our party line had not one, but two teenage daughters and when school was out, they were on the phone.

Large portions of our country would still have the party line system if it wasn’t for federal regulations demanding all homes receive touch-tone service. I firmly believe the switch which serves my family farm was the absolute last switch upgraded in the nation. We got touch-tone service on the last day allowed by law. I remember the little GTE truck pull up at 4:30 asking us to try our phone and handing some information to the parents. I assume it was our new individual phone number.

I was in college during the break-up of ATT. Well, that is overstating it a bit. I had graduated from a junior college and was in the process of being fleeced by Devry, certainly not a school I would recommend in this or any other lifetime. One of our classes had to break up into groups to create presentations on various topics. The group I was with chose the break-up of ATT. Thankfully everyone else in that group was petrified of public speaking so I told them I would do the presentation if they did the report. It worked out well since the rest of them lived in the same apartment complex. Suffice it to say this is a topic which came up multiple times in my past.

One dude in the presentation simply couldn’t understand why the break-up was a good thing. He kept asking questions like “before the break-up I could lease a phone for 39 cents per month now I have to buy one, how is that good?” He had “me & my” syndrome and you just couldn’t shake it out of him. Today, if he is still around, I hope he has finally caught on. If you happen to still think that was a bad idea, or worse yet, think federal regulation is a bad thing, read on and think again.

We would have never gotten the Internet without the break-up of ATT. Motorola would not have been able to establish a cell phone market (called car phones then because most were installed in cars.) Today you would not have your flat monthly rate sucky VOIP service. The concept of flat rate, let alone discount long distance would have never been introduced. You know the names which became big after the break-up, Sprint, MCI, Verizon and others. Some of you probably have Sprint for your wireless provider. MCI became part of Worldcom and together they purchased CompuServe. For those who don’t remember CompuServe is was a charge-by-the-minute dial-up version of the Internet before we had the Internet.

You didn’t live through the time when you could get someone’s email address and not be able to send mail to them because they had a different email provider. Oh yes, it is true! Content was king in the pre-Internet days. Each provider tried to be their own information silo charging various access fees. You could not send email from your AOL or Prodigy account to someone on CompuServe or any other competing ISP. There was a major outcry over this. The dam broke cracked CompuServe and AOL inked a deal to link email systems. The dam broke when the Internet backbone was established with open email servers. You didn’t have to live through all of this. You also didn’t have to live through the start-up flame out of DSL providers all trying to resell some other service provider then going out of business without warning.

Today you send email without thinking about it. Today you abandon hard lines for marginal VOIP services. Today most people have cell phone of some sort or other. None of these “todays” would have happened if we hadn’t broken up ATT and passed federal regulations to ensure minimum service levels, much like we did with Obamacare, establishing a minimum level of service then watching the fly-by-night operations cancell policies and close up shop en masse.

Here is a thought for you to ponder though. When your Internet is down and your cell phone battery is dead, how do you dial 911 to report your heart attack? Probably the biggest taken-for-granted federally mandated improvement in the telco world is the creation of 911. I don’t care what problems your local 911 has. Over all this has saved a lot of lives. This was made possible by another federal regulation which mandated all homes have touch-tone service.

Some day the switch which serves my family farm may be updated from that original touch-tone switch machine. I assume it is still the original machine. It doesn’t provide dial-up Internet. It does have caller-id, but, not most other services you take for granted. It is so old the maintenance people told me a brand new fiberchannel cable was trenched in from another switch to that one and the cable is simply coiled on the floor because there is no place to connect it.

Now that is management!